How does Google Adwords price keywords?

seanabc

I found a keyword on Google which is searched for frequently - 55 million times according to Google Suggest - but with no competition.

When I set up my campaign initially two days ago the keyword was priced at 15c. I had set my maximum bid at 20c so I was well covered.

By the end of the day the price had increased to 23c and my ad was no longer being displayed so I increased my maximum bid to 30c. Then yesterday I was a little surprised to see that the keyword had gone up to four euros! That's way too much for me as I wasn't even expecting to make any money in the short-term from running the ad. It's not a money-making keyword and seeing as nobody else has ads running the price can't be due to demand.

I'm just wondering why this price increase happens like this. Have I been bidding against myself?

seanabc

I'm going somewhere towards answering my own question here but I checked today and the price of the keyword has now dropped to 40c. My maximum bid is still 30c so the keyword still isn't active. In fact I think I'm going to drop my bid back to 20c and wait until adwords lowers its price.

mobilegroup

If someone wants to blockbook words, all they have to do is put €4 as their bid, so no one else can get near them. Large companies with massive markets spends wont have a problem doing it.

Look for related work and be geo-specific on your targetting.

regards,

John_flood73

also worth remembering you only pay when someone clicks so 2nd place @10 cent a click might actually be be better than 1st @4 euro!

Branoic

Depends on what the keyword is and what its relation to your site is. If Google don't think its very relevant to the content on your site, the price will go up.